Broadcasters Glued to Little ScreensTV stations ponder profits from new media at annual confab 4/28/2006 08:00:00 PM Eastern
Pappas Telecasting’s stations send out cellphone text alerts on severe weather, traffic and high school sports scores and are preparing to add video. None of these products grab a huge audience, but the efforts signal a new wave of local broadcasting.
Just how to turn a profit with these new-media ventures was a hot topic last week at two major industry events in Las Vegas: the Radio-Television News Directors Association conference (RTNDA) and the National Association of Broadcasters (NAB) convention. At the same events a year ago, station executives seemed anxious about how the Web and other new technology might crunch their businesses. Today, they’re on the offensive, more interested in exploring the new landscape than protecting themselves against it.
News directors said they are eager to develop new product but concerned about how to manage the increased workload in newsrooms often resistant to change.
On the business side, general managers and station owners are keen to crack the Internet sales market but challenged to court non-traditional advertisers and interactive agencies.
One of the most recited bits of advice among local broadcasters in Las Vegas: Hire Web-only salespeople, rather than lump online in with TV-sales responsibilities, where it doesn’t get its due attention.
Broadcasters Play Catch-up
Broadcasters are playing catch-up in the local-Internet race. Local-Internet advertising revenue exploded last year, jumping to $4.4 billion, up 79% from $2.7 billion in 2004, according to research firm Borrell Associates.
In 2006, the market is projected to hit $4.8 billion. While the figures pale in comparison with the $60 billion spent annually on TV advertising, the Internet is a growth medium.
TV stations, however, lag far behind newspapers and pure Internet companies, such as Google, that sell local ads. In 2005, for example, TV stations took in $283 million from local online business, according to Borrell, while newspapers nabbed $2 billion and Internet companies $1.3 billion. (TV stations doubled their revenue from 2004 to last year.)
Meanwhile, usage of the Internet and wireless devices continues to grow. About 50 million U.S. households have upgraded to broadband Internet service. Close to 200 million have cellphones. A small percentage—about 10%, news directors estimated—have video capability on their cellphones, although that number is expected to balloon over the next several years.
At a time when TV viewing is declining, these revenue and usage figures have station executives’ rapt attention.
“This is where the excitement, the buzz and the growth is right now,” says Meredith Corp.’s VP of Broadcasting Solutions Tom Cox. “We need to use these tools to deliver our core mission of local content and local value.”
Just what to deliver on new platforms, however, is giving many local managers pause. At Scripps-Howard–owned KSHB Kansas City, Mo., the station offers news and video on its Web site, and users can build their own newscast from video clips.
But News Director Debbie Bush wants to get more involved with advance features, and, at RTNDA, she was hunting for ideas.
“We’re trying to evaluate where we go next,” she says. “We’re looking at podcasts, RSS [syndication feeds] and original content. We want to hear how other people have done it and what problems they’ve had.”
Two local-Internet veterans, KING Seattle Director of Digital Media Cory Bergman and New England Cable News Director of Digital Media Steve Safran, founders of local-TV and technology blog LostRemote.com, offer simple ideas to engage viewers. As reporters work a story, they say, they could post research and documents, such as government reports and press releases, on the Web site. Also, they say, featuring longer interviews or raw video online could add to a story’s lifespan.
With the popularity of community and sharing sites such as MySpace.com and YouTube.com exploding, Safran says stations should also encourage viewers to participate. New England Cable News, for instance, hosts a section on its site called Video New England, where viewers upload their own clips. Bergman encourages stations to let users vote on stories, rank them and post comments.
The Web is a top priority for all the major station groups. CBS Television Stations has relaunched the Web sites for all of its CBS outlets and, following the upfront, will redesign the sites for its UPN stations that will carry The CW come September.
The new CBS-station sites use the tagline “Always On” in order to convey a round-the-clock news presence, with news refreshed throughout the day. The stations produce exclusive Web content, including daytime Webcasts, and archive thousands of video clips.
“Users will seek out content that is relevant to them,” says Jonathan Leess, the group’s digital media president. But getting newsrooms to embrace the 24/7 digital newsroom, he admits, can be challenging. Persuading a news director “to break a story live on the Internet when they have a 5 p.m. show coming up in 18 minutes is unheard of,” he says, “but that’s what we’ve been working on.”
Similarly, NBC Universal has revamped its 14 sites, adding two video players to the homepage and developing Web-only programs like The Pickoff, a fantasy sports show, and The Payoff, a personal-finance program. Both are produced by a new broadband production unit.
“You won’t find these shows on the air,” says Ric Harris, executive VP of digital media for NBC U’s station group.
New NAB President/CEO David Rehr encourages stations to dive into new platforms for the sake of survival. “Every new stream of programming is potentially a new source of revenue,” he says. Local broadcasters—TV and radio—have an “irreplaceable advantage,” he adds, thanks to their localism and connections to their communities.
“Our future is a broadcast signal on every gadget,” he continues. “Cellphones, laptops, PDAs, and multichannels of DTV and digital radio.”
TV stations ponder profits from new media at annual confab
Local broadcasters are increasingly defining themselves by smaller screens—computers, cellphones and personal digital assistants (PDAs)—to attract viewers and kick-start new revenue. In Louisville, Ky., NBC affiliate WAVE (owned by Raycom Media) asks users to give their Kentucky Derby picks in a new online audio blog. On their Web sites, NBC Universal-owned stations stream Internet-exclusive shows on fantasy sports and finance.
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